The House and Senate return the week of January 6 to start the second session of the 113th Congress. The Senate will return on January 6, followed by the House on January 7.
National Housing Trust Fund
Work on funding the National Housing Trust Fund (NHTF) will continue on three tracks. The first is the prospect of implementation of the NHTF with a new director at the Federal Housing Finance Agency. Mel Watt will be sworn in on January 6. NLIHC and numerous others are urging him to lift the suspension on the funding of the NHTF and the Capital Magnet Fund by Fannie Mae and Freddie Mac that was imposed at the outset of the financial crisis of 2008. Also, NLIHC understands that HUD is moving to finalize the NHTF regulations.
The second track is to assure that the NHTF is protected and well-funded in any housing finance reform legislation that moves this year. The Senate Committee on Banking, Housing, and Urban Affairs completed its series of hearings on housing finance reform in 2013. The Committee is now drafting comprehensive reform legislation that is expected to be similar to reform legislation introduced by Senators Bob Corker (R-TN) and Mark Warner (D-MN) (see Memo, 6/28/13). The NHTF was included in the Corker-Warner bill. In Committee hearings, Senators from both sides of the aisle indicated that the NHTF will likely be included in future legislation that advances through the Committee and the full Senate. The major question is what level of funding will be provided.
In 2013, the House Committee on Financial Services approved the Protecting American Taxpayers and Homeowners Act (see Memo, 7/12/13), legislation that would privatize the government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and eliminate the NHTF. There is no indication to date that there is adequate support for the measure to be approved by the full House of Representatives. Alternative bills are being developed by several Members of the House and NLIHC is working to make sure that the NHTF is included in them.
The third track is the pursuit of major funding for the NHTF through federal tax reform. Modifications to the mortgage tax deduction (MID) are the basis of the United for Homes campaign to fund the NHTF and H.R. 1213, the Common Sense Housing Investment Act that was introduced by Representative Keith Ellison (D-MN).
Prospects for tax reform in the 113th Congress are uncertain. Senate Committee on Finance Chair Max Baucus (D-MT) has been nominated to be the ambassador to China. If he is confirmed, as is expected, Senator Ron Wyden (D-OR) will likely be the new chair of the Committee. While the Committee has done a great deal of work on tax reform, no documents that relate to MID reform have emerged.
No draft legislation related to MID has been circulated by the House Committee on Ways and Means to date. Chair Dave Camp (R-MI) is said to have completed a comprehensive tax reform bill, but has held it back at the urging of House leaders. If a markup does occur, it is highly unlikely that any reform legislation coming out of Ways and Means Committee will be bipartisan.
Budget and Appropriations
The House and Senate’s first order of business in 2014 is finalizing FY14 appropriations. Congress is expected to immediately advance an FY14 omnibus appropriations package of $1.012 trillion, the amount provided in the Bipartisan Budget Act of 2013 (BBA), H.J. Res. 59 (see Memo, 12/20/13). Congress has until January 15 to finalize this appropriations package before the continuing resolution (CR) currently funding the government expires.
Lead Congressional appropriators worked through the recess to craft an FY14 spending package that includes all twelve of the Appropriations Subcommittees’ bills in order to avoid resorting to a new CR to cover the remainder of FY14. Appropriators are expected to receive a bill from leadership and negotiate any changes during the week of January 6. The full House is expected to bring a bill to the floor first, with the Senate acting on a House-passed bill by January 13 before the CR ends.
The revised 302(b) allocations for the Appropriations Subcommittees, including the Transportation, Housing and Urban Development, and Related Agencies Subcommittee, are not yet public. 302(b) allocations are how the $1.012 trillion will be divided among the twelve subcommittees.
NLIHC signed a letter, organized by the National Housing Trust, addressed to appropriators that urged full FY14 funding for Project-Based Rental Assistance and Tenant-Based Rental Assistance. “Because of flat funding and cuts, HUD and providers have been forced to take extraordinary measures to continue to house low-income seniors, persons with disabilities and families with children…We encourage you to provide sufficient funding for the Department of Housing and Urban Development (HUD) in order to renew all existing rental assistance contracts and vouchers,” wrote the 35 signers.
After Congress passes the FY14 spending package, the Administration is expected to move forward with its FY15 budget request to Congress, which the President is statutorily required to submit by the first Monday in February. The Administration appears to be working to meet this deadline, although the last two budget requests were submitted after the February deadline.
Congress does not have to negotiate an FY15 budget resolution amount because the BBA established both the FY14 and FY15 spending caps. The two chambers may introduce budget resolutions, but they are not expected to depart from the negotiated FY15 spending level.
The federal Protecting Tenants at Foreclosure Act (PTFA) is the only federal protection for renters in homes undergoing foreclosure. It will expire on December 31, 2014 if not extended by Congress. The PTFA provides renters with the right to a least 90 days notice before being required to move after a foreclosure. Legislation has been introduced in the House (H.R. 3543) by Representative Keith Ellison (D-MN) and in the Senate (S. 1761) by Senator Richard Blumenthal (D-CT) to make the PTFA permanent and to add a private right of action to the law.
HUD Housing Assistance Reforms
Hopes for housing assistance reform provisions early in the year rest in the FY14 HUD appropriations bill, which will be included in an omnibus spending bill (see related article).
The Senate committee bill for FY14 HUD funding, S. 1243, included provisions that were sought by HUD in its FY14 budget request to Congress. These include:
- A new definition for “extremely low income,” (ELI) which would allow housing resources to better serve more households. Currently, ELI is defined by HUD as having an income below 30% of area median. The provision would create a new statutory definition of ELI, to mean having an income that is the higher than either 30% of area median or the federal poverty line, adjusted by family size. The change is particularly significant in rural areas, where area median income may be so low that identifying “extremely” low income households can leave many households in need out of the HUD programs.
- Revised inspection requirements for housing choice voucher units in order to save staff time and move families into units more quickly. The provision would allow public housing agencies to make initial payments to voucher unit landlords even when a unit does not pass the initial inspection, if the failure was not due to life-threatening conditions. The provision would also allow a family to occupy a unit if the home had met housing quality standards from a federal housing program in the previous 12 months and give tenants the right to request interim inspections thereafter.
- Revisions to the Rental Assistance Demonstration program that would expand the number of public housing units that could convert subsidy streams under RAD from 60,000 to 150,000 and extend the demonstration’s end date from the end of FY13 to the end of FY15.
- Utility allowance provisions that would limit utility allowances to the maximum unit size for each households, with exceptions for families that include persons with disabilities.
- A phase-in of a flat rent floor of 80% of fair market rents (FMRs) for higher income public housing residents.
While any of these reforms might be included in the final FY14 HUD spending bill, only a few, if any, likely will be. Of these provisions, the House FY14 HUD funding bill, H.R. 2610, included only the revised definition of extremely low income and the RAD revisions.
NLIHC and other national organizations interested in advancing provisions from rental assistance reform bills from years past encouraged appropriators in an October 21 letter to House and Senate appropriators to include eleven “high-priority” areas of broad consensus from previous bills in any FY14 HUD funding bill, including provisions related to streamlining rent calculations and inspections, revising the ELI definition, adopting the 2012 stakeholder agreement on Moving to Work expansion, improving the Family Self Sufficiency program, and revising screening protocols for prospective tenants.
Aside from possible action in the FY14 omnibus bill, the House and Senate authorizing committees have not produced legislation, or circulated discussion drafts on broad rental assistance reform bills. No hearings are currently scheduled on the subject in either the House Committee on Financial Services or the Senate Committee on Banking, Housing and Urban Affairs.
Read the October 21, 2013 letter on rental assistance reforms for the FY14 HUD bill at: http://bit.ly/1hquMwp
The only significant set of regulations currently in the queue for review at the Office of Management and Budget (OMB) are proposed changes to public housing demolition and disposition policies. These improved demolition/disposition regulations have been promised by HUD’s Office of Public and Indian Housing (PIH) since the summer of 2011. An interim fix to demolition/disposition problems was in PIH Notice 2012-7 (see Memo, 2/3/12).
The final regulations regarding improved affirmatively furthering fair housing (AFFH) obligations are expected this year after long-awaited proposed rules were published on July 19, 2013 (see Memo, 7/19/13).
Since September 2011, advocates have been pressing HUD to issue a number of regulations (see Memo, 10/7/11 and 5/18/12). Among the rules advocates urged HUD to act upon, in 2013 HUD did issue final rules pertaining to Disparate Impact (see Memo, 2/8/13) and the Public Housing Capital Fund (see Memo, 11/8/13). Key regulatory actions yet to be taken include final rules pertaining to project-based vouchers and voucher portability, as well as proposed rules on PHA consortia, the Section Eight Management Assessment Program (SEMAP), Section 3 employment, training, and business opportunities, and sexual harassment, and sexual harassment.